There are several ways in which donating to the Muskoka Heritage Trust can provide tax benefits to donors. 

Donation of cash or securities

As a registered charity, the Muskoka Heritage Trust can issue receipts for the value of a donation, which can be used to reduce income taxes.  If qualified securities are donated, the capital gain that has accumulated since the donor acquired the securities is not taxable.  Please see the CRA website for further information.

Donation of land

The donation of land can have different tax benefits, depending on the situation.  The value of the property will be appraised and a charitable donation receipt will be issued by the Muskoka Heritage Trust for the fair market value of the land.

If the property qualifies as ecologically significant, under the federal Ecological Gifts Program (often called Ecogifts), there are enhanced tax benefits:

• Normally, if a donor disposes of land, if its value has increased while owned by the donor, that increase in value is a taxable capital gain.  However, in the case of an ecological gift, the taxable capital gain is reduced to zero.
• Unlike other charitable gifts, there is no limit to the deduction or credit for an ecological gift donation in a given year.
• Any unused portion of the donation may be carried forward for up to five years.

Donation of a Conservation Easement

A conservation easement is a legal agreement that is registered on title and that protects a property’s conservation value by permanently placing terms and conditions on its use.  For example, a conservation easement may not allow the property to be subdivided or may limit the number and location of structures. The donor continues to own the land and may sell it or bequeath it to heirs, but the conservation easement remains on title. The Muskoka Heritage Trust ensures that the restrictions put on the property are followed in the future, regardless of who owns the land.

Because of the restrictions placed on the use of the land, its fair market value is reduced.  For example, much of the value of a large piece of property may be the fact that it can be subdivided.  If that is no longer allowed by the terms of the conservation easement, that may significantly reduce the fair market value of the property.  

If a donor gives the Muskoka Heritage Trust a conservation easement on a property, an appraiser must provide a report of the value of the property with and without the conservation easement. The reduction in the value of the property is the value of the conservation easement.  This is the amount used in the charitable donation receipt issued by the Muskoka Heritage Trust.  

A conservation easement can also qualify for Ecogift, if the property qualifies as ecologically significant.  In that case, the donation receives the enhanced tax treatment under the Ecological Gifts program outlined above, under donation of land.

Another tax benefit of the donation of a conservation easement is the reduction of municipal property taxes because the fair market value of the property is reduced.

American taxpayers

American taxpayers can donate cash, securities, land and conservation easements to Canadian land trusts, including the Muskoka Heritage Trust, and receive American charitable tax receipts by donating them to the American Friends of Canadian Land Trusts.   American donors of land or conservation easements can also avoid paying Canadian capital gains tax in some circumstances.